Investing term

What is Calendar rule?

Rebalance on a fixed schedule (e.g. annually) regardless of how far the portfolio has drifted.

A calendar rule rebalances your portfolio on a fixed schedule — say once a year — no matter how far it has or hasn't drifted. Its appeal is simplicity and discipline: you don't have to monitor anything, just act on the date. The trade-off is it may rebalance when little has changed, or wait while a big drift builds between dates.

For example

Every January 1st you reset to your target mix — even if that means only a tiny trade, the habit guarantees drift never compounds for years unchecked.

Calendar rule is taught hands-on in Stage 18 — Rebalancing & Maintenance.

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Related terms

5/25 ruleRebalance any sleeve that has drifted more than 5 percentage points absolute, or 25% relative, from its target weight.New-money rebalancingBringing the portfolio back to target by directing new contributions into underweight sleeves, rather than selling overweight ones.Rebalancing premiumThe small return boost a disciplined rebalancer earns over a buy-and-drift portfolio, by systematically selling high and buying low.Target allocationThe intended weights of each asset class, sector, or position in your portfolio — the shape you set on a calm day.
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